Igor Mazepa about state subsidies for Ukrainian farmers: how they are currently being used and how to make them an effective stimulus for agricultural development

28.08.2019

Igor Mazepa, CEO of Concorde Capital investment company, comments state subsidies for Ukrainian farmers
At the current moment, government of Ukraine is taking quite a passive role on the issue of distributing subsidies. In essence, the first entity that arrives and makes an offer will practically gain a large piece of this pie. Though all agri firms can compete for state support in theory, only 10-20 enterprises have been able to gain it in recent years – comments Igor Mazepa, CEO of Concorde Capital investment company.
It’s obvious that this situation has to be changed. What’s needed is a clear state strategy of development and transition to understandable stimuli that are supported by concrete plans. If the state supports a certain sphere, it’s necessary to understand what goals are to supposed be reached. Only then can state support be distributed. Unfortunately, we don’t have that now. The state’s agrarian budget is approved for a year, based on the situation. That’s why there is so little effectiveness: who runs quickest to a ministry or fiscal committee can compete for something. Others can only make do with what large lobbyists were able to extract for them.
My colleagues, analytics at Concorde Capital, and I believe that the more important question now is how to stimulate farmers in the future, and whether they need subsidies – says Igor Mazepa. That's because most of them are profitable enough on their own and they don't need serious state support. But regarding the agricultural sector's development, particularly the construction of new capacities and introducing new technologies, then state stimuli are very important for companies that invest in development and create jobs. At the same time, it’s necessary to improve control on the use of state support – summarizes Igor Mazepa.